UNT audit planned, finance staff shaken up after shortfalls

The University of North Texas has hired outside auditors to review financial records systemwide after budgetary inaccuracies caused ongoing revenue shortages, Chancellor Lee Jackson said Wednesday.

The revelations of shortfalls come on the heels of a sweeping shake-up in leadership within UNT’s finance division a week ago, including the resignations of three top finance officials.

Jackson said UNT President Neal Smatresk, who started Feb. 3, is “responding aggressively to correct the current-year budget issues at UNT.”

“The first step is to fully understand the nature of the revenue shortages and then to be very direct and open in implementing a corrective action plan on campus,” Jackson said in a prepared statement.

UNT also confirmed Wednesday that the shake-up in the finance division includes the Dallas campus. Carlos Hernandez, chief financial officer and vice president for finance at UNT Dallas, resigned last Thursday, citing personal reasons, officials said.

That’s the same day resignations were submitted by Andrew Harris, UNT’s vice president for finance and administration, and Jean Bush, senior vice president for finance. Both worked at the Denton campus. A fourth finance employee also resigned, but officials said she did so to accept another job.

Jackson said in his statement that the university would not comment on personnel issues. However, the UNT System board of regents is to meet Thursday in Dallas, and one agenda item for the closed-door session is “consideration of individual personnel matters related to ongoing audits and investigations.”

Jackson said the problems were caused by UNT’s failure to accurately project the amount of state funding it would receive for employee benefits. He said UNT has notified the state auditor’s office and would seek its guidance in documenting shared-benefit expenses from prior years.

“This has caused budget problems for the University in the past which are now continuing into fiscal 2014,” Jackson said. “We are responding aggressively to understand this issue, report it to the proper agencies and take all appropriate corrective action.”

He said the system is also “responding aggressively to upgrade our financial controls, records and leadership.” That includes initiating a multimillion-dollar upgrade to PeopleSoft financial software and creating creating a “consolidated controller” position to oversee accounting operations.

Jackson did not specify how large the revenue shortages could be. A review of internal records by the Denton Record-Chronicle found the impact just to UNT’s library system in recent years could be several million dollars.

The library problems became public when UNT budget officials said libraries would have to absorb an additional $1.7 million in cuts to cover employee benefits.

The announcement prompted an online campaign to prevent cuts to the libraries, which are supposed to be funded by student fees.

According to a series of internal UNT emails obtained by the Record-Chronicle under Texas open records laws, UNT had used state funds to pay benefits for employees whose wages are not paid by state dollars. That practice is not allowed by the state.

One email, sent Nov. 13 by Bush to library dean Martin Halbert, said the budget woes went beyond the library.

“Note that the library is ‘not alone,’” Bush wrote. “The impact will be felt by other fee-based and service department operations.”

Smatresk hinted at fiscal unrest at UNT in a Feb. 9 interview with the Record-Chronicle.

“I’m going to be devoting significant amounts of time digging into the budget over the next two weeks as we prepare for the legislative session,” he said at the time.

Jenna Duncan is a staff writer for the Denton Record-Chronicle. Ed Timms is a Dallas Morning News staff writer.

To post a comment, log into your chosen social network and then add your comment below. Your comments are subject to our Terms of Service and the privacy policy and terms of service of your social network. If you do not want to comment with a social network, please consider writing a letter to the editor.